What factors contributed to zkSync’s drastic 39% price drop post-airdrop, and what are analysts saying about zkSync’s price prediction for the coming months?
Table of Contents
What exactly happened?
Controversy, public reaction, and skepticism
zkSync price prediction: how will it fare further?
FAQs
On June 17, zkSync (ZK) tokens were distributed through an airdrop, creating a lot of initial interest. However, blockchain analysis revealed that nearly half of the main wallets that received the new zkSync token sold their entire allocation shortly after.
This large-scale sell-off led to a steep 39% decline in the token’s price, dropping from its launch price of $0.3098 to a low of $0.1904 on June 18. As of June 19, the price has recovered slightly, trading around $0.2215.
zkSync price chart | Source: CoinMarketCap
So, what exactly happened here? And how does this impact zkSync price predictions? Let’s delve into the details to understand the situation better.
What exactly happened?
zkSync announced its much-anticipated airdrop of the ZK token on June 11. This event aimed to distribute 17.5% of ZK’s 21 billion token supply to 695,000 eligible wallets on June 17. Additionally, 33.3% of the tokens were reserved for the project’s team and investors, intended as a reward for early users and long-time supporters.
Introducing the ZK TokenChecker → https://t.co/O2UonCvfziAnnouncement → https://t.co/hjgI14PHoiDocs → https://t.co/taWBoCnfbcIt’s time to put the ZK token into the hands of the community. It’s your turn to govern ZKsync’s future. pic.twitter.com/VD3fZgH5bf
— ZK Nation (@TheZKNation) June 11, 2024
The announcement initially generated notable excitement within the crypto community. Eligible users were promised up to 100,000 ZK tokens, depending on criteria met before a snapshot taken on March 25.
However, shortly after the airdrop went live, criticism began to mount. Many long-term and active users reported receiving fewer tokens than they felt they deserved, while less active wallets received higher allocations.
The situation further escalated when several top-ranking projects built on zkSync, like the NFT project zkApes, revealed they had not received any airdrops despite generating colossal gas fees for the network.
We generated $15 million in gas fees for @zksync , but received no airdrop in return. What a joke!!!#zk #zksync
— zkApes | Build on zkSync (@zk_apes) June 12, 2024
These projects formed a coalition to pressure zkSync’s team for a fairer token allocation, demanding transparency and fairness.
Despite the criticism, the airdrop went live on June 17, and what followed was a large-scale sell-off. Data from blockchain analysis firm Nansen showed that 41% of the monitored addresses sold their entire zkSync airdrop, while 29.2% sold some of their tokens. This massive sell-off led to a steep decline in the token’s price.
Critics argued that the criteria used for the airdrop were inadequate in preventing Sybil attacks, where multiple wallets are manipulated by a single user to amass tokens and then dump them after listing on exchanges.
Despite these criticisms, zkSync defended their approach. They mentioned rewarding genuine participants while maintaining fairness and integrity.
ZKsync never invited people to farm. It always strived to build a community of people who deeply care about the mission of ZK Credo and the incredible potential of the ZK tech.Almost every blog post, twitter message, public statement of ZKsync focuses on the long-term mission,…
— ZK Nation (@TheZKNation) June 15, 2024
Controversy, public reaction, and skepticism
The zkSync airdrop was meant to be a celebration, rewarding loyal users and early supporters. However, the aftermath has been far from celebratory.
Mudit Gupta, Chief Information Security Officer (CISO) at Polygon (MATIC) Labs, was among the first to voice concerns. He pointed out the apparent lack of effective Sybil filtering, which allows individuals to exploit multiple wallets to maximize their airdrop rewards.
zkSync airdrop is out. Most farmable and farmed airdrop ever probably. Almost no sybil filtering as far as I can see.Anyone who knew the criteria could've easily farmed the shit out of it.Makes you appreciate what LayerZero is trying to do with sybil filtering.
— Mudit Gupta (@Mudit__Gupta) June 11, 2024
Adam Cochran, a partner at Cinneamhain Ventures, echoed these sentiments. He noted that the criteria for receiving the airdrop were easy to meet for those manipulating the system, yet could be missed by genuine users due to the nascent stage of zkSync’s ecosystem.
I love the zkSync guys but damn that was not a well planned airdrop from a sybil perspective.Those criteria are easy to not hit as a real user, and easy to hit as a farmer, and had no anti-sybil program.Real users could easily use 1-2 dapps or only a handful of tokens on your… pic.twitter.com/PiqprIbKJ3
— Adam Cochran (adamscochran.eth) (@adamscochran) June 11, 2024
The community’s reaction was also swift and vocal. Anton ProfiT, a prominent user, outlined the criteria for the airdrop, including interactions with smart contracts, transactions in Paymaster, and holding Omnibus NFTs. Despite meeting these criteria, many users found themselves ineligible for the airdrop.
🚨Today the @zksync team announced an airdrop distribution and a story about what exactly this distribution will be for.✅ Criteria:📍You are an active user and hold liquidity in some projects (pools, lendigs)📍Your wallet has been active on the ZkSync Era network for more… pic.twitter.com/RMgBi2STWF
— Anton ProfiT (@AntonProfiT) June 11, 2024
ProfiT argued that the zkSync team must have made mistakes in the distribution process and called for an opportunity to appeal. His frustration resonated with many in the community who felt unfairly excluded.
Other users shared similar experiences, expressing disappointment after working for zkSync for a year and finding their wallet ineligible.
Further complicating matters were allegations of favoritism. Nonzee, another user, claimed to have discovered that a zkSync developer managed 47 wallets, receiving a substantial allocation of tokens through connections between wallets.
Nonzee’s findings suggested that the developer exploited insider knowledge to maximize rewards, leaving regular users with minimal or no allocations.
In a nutshell, users are demanding clarity on why many eligible wallets were deemed ineligible and are seeking clarifications.
zkSync price prediction: how will it fare further?
Under peak bull market conditions, a crypto analyst has placed zkSync’s price prediction between $0.80 and $1.40. In current market conditions, zkSync might achieve a fully diluted valuation (FDV) similar to existing L2s, suggesting a price range around $0.40.
$ZK Price predictions and valuation models$ZK @zksync just launched their token today while airdropping 17.5% of their 21B total token supply to users of the network.Considerations🔹Raise –> @zksync 's latest valuation is $1.25B in a Series C round led by @blockchaincap and… pic.twitter.com/pyvUWP3Hcb
— Defi_Mochi (@defi_mochi) June 17, 2024
In a more conservative scenario, zkSync could reach 2-3 times its private valuation FDV, ranging from $2.5 billion to $3.75 billion. This would potentially place zkSync’s price forecast between $0.11 and $0.17.
Meanwhile, using available data and technical analysis, several algorithmic websites have outlined some potential price trajectories for zkSync in the coming years.
zkSync price prediction for 2024
Based on the analysis from CCN.com, the zkSync price prediction for 2024 ranges from a minimum of $0.20 to a maximum of $0.50. The average expected price is around $0.48. Digitalcoinprice offers a slightly higher estimate, suggesting the zkSync crypto price prediction for 2024 is around $0.49.
zkSync price prediction for 2025
Looking ahead to 2025, CCN.com predicts a minimum price of $0.48, with a potential maximum of $0.59. The average price is expected to be approximately $0.58. Digitalcoinprice aligns with this view, forecasting a price of $0.59 for zkSync in 2025.
zkSync price prediction for 2030
By 2030, zkSync’s price could see more increases. According to CCN.com, the ZK token may reach a maximum level of $1.69, with the average price hovering around $1.64. Even in a more conservative scenario, the price could be $1.53. Digitalcoinprice supports this long-term bullish outlook, predicting the zkSync coin price prediction for 2030 to be $1.69.
Several factors will influence zkSync’s future price. The project’s success in addressing current controversies, such as the airdrop issues and Sybil attack concerns, will play a crucial role in impacting the zkSync price prediction.
It’s worth noting that these predictions, while data-backed, should be taken with caution due to the inherent volatility of the crypto market. As always, you should conduct your own research and consider various factors before making investment decisions. Always remember, never invest more than you can afford to lose.
FAQs
Is zkSync a good investment?
zkSync has shown potential, but it’s a risky investment. After airdrop excitement, many sold their tokens, causing a large price drop. The project’s future depends on resolving current issues and gaining user trust. You should consider this volatility and perform thorough research before investing.
Will zkSync go up or down?
Predicting zkSync’s price is challenging due to recent sell-offs and controversy. Some analysts forecast a recovery, with potential prices ranging from $0.20 to $0.50 in 2024. However, uncertainty remains, so it’s crucial to monitor market trends and project developments closely.
Should I invest in zkSync?
Investing in zkSync carries high risks and potential rewards. The recent price drop and controversy highlight the need for caution. If you believe in the project’s long-term vision and are comfortable with high volatility, it could be worth considering. Always do your own research and consider your risk tolerance before investing.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.